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Understanding Basic Bitcoin Terminology and Concepts

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The Internet was introduced to us with so many opportunities and possibilities. However, because of the misusage and illegal treatments of cyber law offenders, the Internet has found its black hole. What more if it involves money and other valuable items?

The cryptocurrency or alternatively called as digital currency was introduced to the world in 1998. Its main purpose is to have a mode of exchange for faster and easier transactions without the use of physical money. It also runs on decentralized system, differentiating itself from the usual systems used by banking institutions. It has so many advantages in our day-to-day activities.

You can acquire bitcoins, a type of cryptocurrency, to purchase goods and commodities online. You can assure safety and transparency using this mode of trading because it uses maximum-security encryption that prevents unauthorized users from accessing your account. It also keeps a ledger of all transactions made real-time.

The Dangers and Risks of Cryptocurrency

While there are numerous benefits to using this new trend in currency exchange, there are also setbacks and pitfalls that you need to avoid or prevent. Here are some of the common implications that Bitcoin users need to consider before acquiring it:

  1. It is untraceable.

This feature attracts crimes in so many ways. Offenders and criminals can freely purchase and sell drugs and other illegal goods over the Internet with minimal risk of getting caught or tracked down by police authorities. This makes it very similar to regular physical money that criminals can use.

  1. It is easy to lose.
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If you have a credit card that was stolen or used in fraudulent activities, it is easier to fix because your bank will take responsibility for it. The authorities can also recover your lost cash. In the means of Bitcoin, if you lost it then there is no way you can get it back. There isn’t an identifying mark plastered all over it that says it is yours. Anyone who holds the code owns the bitcoin.

  1. It is difficult to trade.

You cannot just whip out your credit card and buy bitcoins on the Internet. There are many services offered online that provides such but not as easy as transferring money through PayPal or other remittance centers.

  1. It is still new in the market.

The Bitcoin cryptocurrency is still a growing network and there are many competing currencies that can possibly outrun its success. If someone finds a flaw in the system, they can use it to counterattack by creating a more systematic and convenient way of currency exchange on the Internet.

  1. It cannot buy everything.

Not every store accepts credit cards and so is Bitcoin. There are only selected few online shops that accept transactions via Bitcoin purchasing.

There is no guarantee that using cryptocurrency in our everyday transactions will provide the safest results. It has no reassurance of its stability in the market and the value of each bitcoin can change drastically without prior notice. Bitcoins can be a good investment but one has to practice utmost care and intuition while using this mode of currency.

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